Correlation Between Lifeway Foods and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Lerøy Seafood at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lifeway Foods and Lerøy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Lery Seafood Group, you can compare the effects of market volatilities on Lifeway Foods and Lerøy Seafood and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lifeway Foods with a short position of Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Lerøy Seafood.
Diversification Opportunities for Lifeway Foods and Lerøy Seafood
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifeway and Lerøy is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Lifeway Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lifeway Foods are associated (or correlated) with Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Lifeway Foods and Lerøy Seafood
Assuming the 90 days horizon Lifeway Foods is expected to generate 2.26 times more return on investment than Lerøy Seafood. However, Lifeway Foods is 2.26 times more volatile than Lery Seafood Group. It trades about 0.07 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.07 per unit of risk. If you would invest 2,120 in Lifeway Foods on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Lifeway Foods or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Lery Seafood Group
Performance |
| Timeline |
| Lifeway Foods |
| Lery Seafood Group |
Lifeway Foods and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Lerøy Seafood
The main advantage of trading using opposite Lifeway Foods and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Lerøy Seafood can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lerøy Seafood will offset losses from the drop in Lerøy Seafood's long position.| Lifeway Foods vs. Hormel Foods | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB | Lifeway Foods vs. NorAm Drilling AS |
| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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